Economics I Practice Exam
Course Introduction
Economics I provides an introduction to the fundamental principles of economics, focusing on both microeconomic and macroeconomic concepts. Students will explore topics such as supply and demand, market structures, consumer behavior, production, and cost analysis. The course also covers the basics of national income, inflation, unemployment, and fiscal and monetary policies, equipping students with the analytical tools necessary to understand economic decision-making at individual, business, and government levels. Practical examples and real-world applications are integrated to help students connect theoretical concepts to everyday economic issues.
Recommended Textbook
ECON MICRO 6th Edition by William
A. McEachern
Available Study Resources on Quizplus
21 Chapters
4209 Verified Questions
4209 Flashcards
Source URL: https://quizplus.com/study-set/3107
Page 2
Chapter 1: The Art and Science of Economic Analysis
Available Study Resources on Quizplus for this Chatper
203 Verified Questions
203 Flashcards
Source URL: https://quizplus.com/quiz/61553
Sample Questions
Q1) Alicia makes the statement that every time she eats chocolate,it starts to rain.Alicia is committing the _____
A)fallacy of composition.
B)fallacy that association is causation.
C)fallacy of segmentation.
D)mistake of ignoring secondary effects.
E)mistake of rejecting a null hypothesis.
Answer: B
Q2) One might commit the fallacy of composition by concluding that _____
A)statements that are true during prosperity are not necessarily true during depression.
B)what is good for the individual is necessarily good for the group.
C)an event that precedes another is necessarily the cause of the latter.
D)intentions need not coincide with actions.
E)the composition of a complex product is not revealed by its exterior appearance.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
3
Chapter 2: Economic Tools and Economic Systems
Available Study Resources on Quizplus for this Chatper
209 Verified Questions
209 Flashcards
Source URL: https://quizplus.com/quiz/61554
Sample Questions
Q1) The term opportunity cost suggests that _____
A)one person must lose when someone else gains in an exchange situation.
B)not all individuals make the most of life's opportunities.
C)executives do not always recognize opportunities for profit as quickly as they should.
D)the only factor that is important in decision making is cost.
E)a good must be given up to get some other good in return as resources are scarce.
Answer: E
Q2) Which of the following economic questions does the decision to give all of the butter an economy produces to the homeless answer?
A)What to produce?
B)How to produce?
C)For whom to produce?
D)Who has a comparative advantage in butter production?
E)Who has an absolute advantage in butter production?
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Chapter 3: Economic Decision Makers
Available Study Resources on Quizplus for this Chatper
227 Verified Questions
227 Flashcards
Source URL: https://quizplus.com/quiz/61555
Sample Questions
Q1) Public goods are both rival and nonexclusive.
A)True
B)False
Answer: False
Q2) Which of the following is primarily a function of the federal government?
A)Increasing the money supply in the economy
B)Ensuring that firms maximize profits
C)Promoting the growth of natural monopolies
D)Providing home mortgage loans
E)Dealing with externalities
Answer: E
Q3) A good is more likely to be produced at home than in the market if:
A)it requires few specialized resources.
B)the average cost of household production is high.
C)the marginal benefit from the good is higher than the marginal cost of production.
D)the marginal benefit from the good is lower than the marginal cost of production.
E)the opportunity cost of household production is high.
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Demand, supply, and Markets
Available Study Resources on Quizplus for this Chatper
206 Verified Questions
206 Flashcards
Source URL: https://quizplus.com/quiz/61556
Sample Questions
Q1) Other things constant,which of these is likely to increase the supply of tomatoes in the market?
A)the introduction of expensive mechanized tomato pickers
B)an increase in the wage rate of tomato pickers
C)a decrease in the cost of fertilizer for tomato plants
D)unseasonably hot, dry weather in the tomato-growing regions of the nation that affects crop yield
E)a decrease in the price of tomato ketchup
Q2) If the number of consumers for a good increases,demand will ______
A)increase.
B)decrease.
C)not change.
D)stay the same, but price will increase.
E)stay the same, but price will decrease.
Q3) When a market is in equilibrium,_____
A)producers earn economic profits.
B)production exhibits diminishing returns to scale.
C)market forces exert no pressure for price to change.
D)industry output is maximized.
E)market forces allow producers to charge the maximum price.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Elasticity of Demand and Supply
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/61557
Sample Questions
Q1) If demand is inelastic,the percentage change in price is greater than the resulting percentage change in quantity demanded.
A)True
B)False
Q2) If the price of a product increases from $15 to $17 per unit and the quantity demanded decreases from 75 to 50 units,then the price elasticity of demand for this product is _____
A)3.2.
B)12.5.
C)17.
D)2.
E)40.
Q3) A government-imposed price floor above the market price of milk would increase consumers' expenditures on milk only if _____
A)demand is elastic.
B)supply is inelastic.
C)demand falls.
D)demand is inelastic.
E)supply is unit elastic.
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Consumer Choice and Demand
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/61558
Sample Questions
Q1) Elvis values the first gravy sandwich at $5,the second at $4.50,and the third at $4.If he buys three sandwiches for $3 each,his total utility has a value of _____
A)$4.50.
B)$1.50.
C)$13.50.
D)$9.50.
E)$12.00.
Q2) If Jennie spends her income on ice cream and biscuits and the price of ice cream is three times the price of biscuits,then _____
A)she maximizes her utility by buying equal quantities of ice cream and biscuits.
B)she maximizes her utility by buying three times as much ice cream as biscuits.
C)she maximizes her utility by buying three times as many biscuits as ice cream.
D)she buys biscuits and ice cream until the marginal utility of ice cream is three times the marginal utility of biscuits.
E)she buys biscuits and ice cream until the marginal utility of biscuits is three times the marginal utility of ice cream.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Production and Cost in the Firm
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/61559
Sample Questions
Q1) An implicit cost is _____
A)any cost a firm cannot avoid in the short run.
B)any expenditure a firm makes.
C)an opportunity cost.
D)accurately measured in accounting statements.
E)ignored by economists.
Q2) If variable cost rises from $60 to $100 as output increases from 15 to 20 units,the marginal cost of the twentieth unit is _____
A)$100.
B)$5.
C)$40.
D)$8.
E)$58.
Q3) Marginal cost indicates by how much total cost increases if one more unit is produced or by how much total cost drops if production declines by one unit.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Perfect Competition
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/61560
Sample Questions
Q1) Which of the following factors ensures that economic profit will be zero in the long run in a competitive industry?
A)Each firm is small relative to the market.
B)Each firm has access to perfect information.
C)Goods produced in the market are homogeneous.
D)Each firm is a price taker.
E)There is easy entry and exit in the market.
Q2) In the short run,producers derive surplus from market exchange because _____
A)the price they receive is greater than the minimum amount they require to sell a good.
B)the price they receive is equal to the minimum amount they require to sell a good.
C)the price they receive is less than the minimum amount they require to sell a good.
D)market price equals average total cost.
E)they can charge higher prices for their products by restricting supply.
Q3) Marginal revenue is the change in total revenue from using one more unit of an input in the short run.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Monopoly
Available Study Resources on Quizplus for this Chatper
197 Verified Questions
197 Flashcards
Source URL: https://quizplus.com/quiz/61561
Sample Questions
Q1) Which of these is a similarity between a monopolist that does not practice price discrimination and a perfectly competitive firm?
A)The firms face the same amount of competition from new entrants into the market.
B)The firms have an equal number of rivals.
C)The firms face perfectly price-elastic demand curves.
D)Price equals marginal revenue at all output rates for both types of firms.
E)Price equals average revenue at all output rates for both types of firms.
Q2) Refer to Exhibit 9.3,which shows the cost and revenue curves for a non-discriminating monopolist.The total revenue earned by the profit-maximizing monopolist at the profit-maximizing output is _____
A)$16,200.
B)$36,000.
C)$39,600.
D)$30,800.
E)$31,000.
Q3) A monopolist's marginal revenue curve is flatter than its demand curve.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Monopolistic Competition and Oligopoly
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/61562
Sample Questions
Q1) Refer to Exhibit 10.8.Suppose Firm A and Firm B are the only 2 airlines serving this market.If Firm B announces holiday discounts,how will Firm A respond?
A)Scenario 1
B)Scenario 4
C)Scenario 1 and Scenario 2
D)Scenario 1 and Scenario 3
E)Scenario 1 and Scenario 4
Q2) Refer to Exhibit 10.8.The dominant strategy equilibrium is illustrated in _____
A)Scenario 1.
B)Scenario 2.
C)Scenario 3.
D)Scenario 4.
E)Scenario 1 and Scenario 4.
Q3) Which of the following helps make a cartel successful?
A)equal costs across firms
B)differentiated output
C)highly variable cost conditions across firms
D)highly variable demand conditions
E)rapidly changing technology
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Resource Markets
Available Study Resources on Quizplus for this Chatper
197 Verified Questions
197 Flashcards
Source URL: https://quizplus.com/quiz/61563
Sample Questions
Q1) A resource that earns only economic rent _____
A)cannot be employed in any other line of production.
B)has an upward-sloping supply curve.
C)has a downward-sloping supply curve.
D)has a marginal revenue product that is less valuable than its marginal cost.
E)has a perfectly elastic supply curve.
Q2) The marginal revenue product curve represents a firm's demand curve for a resource.
A)True
B)False
Q3) The marginal revenue product of labor equals the marginal product of labor times the wage only when the firm is a price taker in the product market.
A)True
B)False
Q4) As the price of a resource increases,_____
A)the demand for the final product produced by the resource decreases.
B)the quantity demanded of that resource decreases.
C)the supply of that resource increases.
D)producers are more willing and able to hire that resource.
E)producers are less willing and able to hire that resource.
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Labor Markets and Labor Unions
Available Study Resources on Quizplus for this Chatper
198 Verified Questions
198 Flashcards
Source URL: https://quizplus.com/quiz/61564
Sample Questions
Q1) The substitution effect of a change in the wage rate refers to _____
A)substituting leisure for work as the wage rate rises.
B)substituting market work for nonmarket work as the wage rate falls.
C)working more hours as the wage rate falls.
D)working fewer hours as the wage rate rises.
E)substituting market work for leisure or nonmarket work as the wage rate rises.
Q2) What are labor unions exempt from?
A)mediation
B)collective bargaining
C)taxes
D)arbitration
E)striking
Q3) Which state has the lowest unionization rate?
A)New York
B)South Carolina
C)New Mexico
D)Texas
E)Florida
To view all questions and flashcards with answers, click on the resource link above.
14
Chapter 13: Capital, interest, entrepreneurship, and Corporate Finance
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/61565
Sample Questions
Q1) Financial intermediaries bring suppliers and demanders together in the market for
A)labor.
B)loanable funds.
C)saving.
D)physical capital.
E)human capital.
Q2) Raising money from many people through online platforms is known as _____
A)crowdfunding.
B)an IPO.
C)dividends.
D)a bail out.
E)trading.
Q3) The exchange of secondhand securities _____
A)takes place in an oligopolistic market.
B)does not provide funds to the firm that issued those securities.
C)includes the initial sale when securities are issued by a firm.
D)involves very few institutional investors.
E)lowers the liquidity of the securities.
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Transaction Costs, asymmetric Information, and Behavioral Economics
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/61566
Sample Questions
Q1) If the production of a sofa requires the purchase of 3 types of inputs and the production of a harp requires the purchase of 30 types of inputs,______
A)the harp-producing firm will buy the sofa-producing firm.
B)the sofa-producing firm will buy the harp-producing firm.
C)harp production will more likely be done through the hierarchy of firms.
D)sofa production will more likely be done through the hierarchy of firms.
E)both harp and sofa production will rely on market exchange because there is more than one input involved in each.
Q2) According to Stigler's search model,magazines like Consumer Reports benefit consumers by increasing the marginal cost of information.
A)True
B)False
Q3) Which of these factors is likely to reduce search cost and price dispersion?
A)growth in the number of educated workers
B)growth in information technology
C)growth in unemployment
D)immigration of skilled workers
E)a decline in the average earnings of workers
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Economic Regulation and Antitrust Policy
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/61567
Sample Questions
Q1) Which act prevents one firm from buying the physical assets of another firm if the effect is to reduce competition?
A)the Clayton Act
B)the Federal Trade Commission Act
C)the Wheeler-Lea Act
D)the Celler-Kefauver Anti-Merger Act
E)the Robinson-Patman Act
Q2) Production by a monopolist would result in the socially optimal allocation of resources if _____
A)price is set equal to marginal cost.
B)marginal revenue is greater than price.
C)marginal revenue is equal to marginal cost.
D)price is set equal to average total cost.
E)marginal revenue is equal to average total cost.
Q3) Which of the following is the best example of a natural monopoly?
A)a company involved in gold mining in the Colorado Rocky Mountains
B)a company involved in filmmaking in Hollywood
C)a company providing electrical service to homes in Seattle
D)Kodak producing film
E)IBM producing computers
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Public Goods and Public Choice
Available Study Resources on Quizplus for this Chatper
198 Verified Questions
198 Flashcards
Source URL: https://quizplus.com/quiz/61568
Sample Questions
Q1) The total welfare cost of a monopoly that engages in rent-seeking activities _____
A)equals only the portion of lost consumer surplus that is not transferred to the monopolist.
B)includes the use of resources devoted to rent seeking.
C)equals the loss of welfare in the economy because of barriers to entry.
D)equals the total economic profit earned by the monopolist.
E)excludes the use of resources devoted to rent seeking.
Q2) Legislation that benefits a narrow geographical interest is called _____
A)competing-interest legislation.
B)pork-barrel spending.
C)populist legislation.
D)public-good spending.
E)quasi legislation.
Q3) Uncongested goods are a natural monopoly and are _____
A)rival and nonexclusive.
B)exclusive and nonrival.
C)rival and exclusive.
D)nonrival and exclusive.
E)nonrival and nonexclusive.
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 17: Externalities and the Environment
Available Study Resources on Quizplus for this Chatper
191 Verified Questions
191 Flashcards
Source URL: https://quizplus.com/quiz/61569
Sample Questions
Q1) The marginal social benefit curve for water quality slopes downward because
A)the total benefit from clean water decreases as water becomes cleaner.
B)the added benefit from cleaner water is greater when water quality is poor than when water quality is high.
C)the added benefit from cleaner water is smaller when water quality is poor than when water quality is high.
D)the total benefit from clean water increases as water becomes cleaner.
E)the average benefit of clean water is higher.
Q2) Refer to Exhibit 17.1,which shows a market for electricity.If technology is fixed,the discrepancy between the market output and the efficient level of output is eliminated by
A)subsidizing production by $0.05 per kilowatt hour.
B)imposing a tax of $0.05 per kilowatt hour on the utility.
C)using a quota system to restrict production to 75 million kilowatt hours.
D)subsidizing production of the good by $0.10 kilowatt hours.
E)letting the utility operate freely.
Q3) Smokers and loud talkers help in generating positive externalities.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Poverty and Redistribution
Available Study Resources on Quizplus for this Chatper
195 Verified Questions
195 Flashcards
Source URL: https://quizplus.com/quiz/61570
Sample Questions
Q1) About ____ of the world's population lives on ____ a day or less.
A)40 percent; $1
B)40 percent; $2
C)50 percent; $1
D)0 percent; $2
E)75 percent; $2
Q2) Which of the following is true of welfare payments?
A)They may help reduce crime, at least temporarily.
B)They are taxed at a 20 percent marginal rate.
C)They are taxed at a low marginal rate in order to provide work incentives.
D)They are unaffected by increases in earned income.
E)They are positively related to income from other sources.
Q3) Which of the following accounts for approximately three-fourths of all welfare spending?
A)Social Security
B)the earned-income tax credit
C)unemployment compensation
D)in-kind transfers
E)Temporary Assistance for Needy Families (TANF)
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: International Trade
Available Study Resources on Quizplus for this Chatper
198 Verified Questions
198 Flashcards
Source URL: https://quizplus.com/quiz/61571
Sample Questions
Q1) Suppose one worker in New Ralph Island can produce 40 walking sticks or 10 boomerangs each hour.The opportunity cost of producing 1 walking stick is _____
A)40 boomerangs.
B)0.01 hour of labor.
C)4 boomerangs.
D)0.25 boomerangs.
E)0.5 hours of labor.
Q2) A tariff is a tax on either imports or exports.
A)True
B)False
Q3) The establishment of GATT resulted in _____
A)lower tariff rates.
B)an increase in the net welfare loss of economies.
C)a decrease in total world trade.
D)increased protectionism.
E)a rise in the price of imports.
Q4) If a tariff increases,everybody loses except the government imposing the tariff.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: International Finance
Available Study Resources on Quizplus for this Chatper
195 Verified Questions
195 Flashcards
Source URL: https://quizplus.com/quiz/61572
Sample Questions
Q1) Since 1983,the United States has typically run a financial account surplus.
A)True
B)False
Q2) The gold standard _____
A)has been in operation since the establishment of the Federal Reserve Board.
B)has been in operation since shortly after World War I.
C)has been in operation since the Bretton Woods agreement was signed.
D)was in operation for about 35 years before World War I.
E)was in operation from the date of the Bretton Woods agreement until the devaluation of the U.S. dollar in 1971.
Q3) The balance on goods and services is _____
A)the same as the merchandise trade balance since services cannot be traded. B)equivalent to the trade balance.
C)the value of all tangible and intangible products exported minus the value of all tangible and intangible products imported.
D)the value of all tangible products exported minus the value of all tangible products imported.
E)the value of all tangible products imported minus the value of all tangible products exported.
To view all questions and flashcards with answers, click on the resource link above.
Page 22
Chapter 21: Economic Development
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/61573
Sample Questions
Q1) One of the reasons why import substitution is popular is that _____
A)it increases the quality of products.
B)infant industries would have to compete against global rivals.
C)it benefits those who supply resources to the favored domestic industries.
D)it slows down an economy's progress in the production chain.
E)the emphasis is on comparative advantage and trade expansion.
Q2) Wages are high in poor countries because businesses are run efficiently.
A)True
B)False
Q3) Throughout the world,poverty is found to be greater among men than women.
A)True
B)False
Q4) People can make better use of resources if they _____
A)have inherited family wealth.
B)are living in developed countries.
C)are a part of the government.
D)are educated.
E)have invested in stocks and bonds in other nations.
To view all questions and flashcards with answers, click on the resource link above. Page 23